Correlation Between Fidelity Advisor and Lsv Value

Can any of the company-specific risk be diversified away by investing in both Fidelity Advisor and Lsv Value at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fidelity Advisor and Lsv Value into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fidelity Advisor Technology and Lsv Value Equity, you can compare the effects of market volatilities on Fidelity Advisor and Lsv Value and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fidelity Advisor with a short position of Lsv Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Advisor and Lsv Value.

Diversification Opportunities for Fidelity Advisor and Lsv Value

0.4

Correlation Coefficient

Fidelity Advisor  Lsv Value

Very weak diversification

The 3 months correlation between Fidelity and Lsv is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Technology and Lsv Value Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Value Equity and Fidelity Advisor is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fidelity Advisor Technology are associated (or correlated) with Lsv Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsv Value Equity has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Lsv Value go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Lsv Value

Assuming the 90 days horizon Fidelity Advisor Technology is expected to generate 1.53 times more return on investment than Lsv Value. However, Fidelity Advisor is 1.53 times more volatile than Lsv Value Equity. It trades about 0.09 of its potential returns per unit of risk. Lsv Value Equity is currently generating about 0.02 per unit of risk. If you would invest  7,455  in Fidelity Advisor Technology on October 11, 2024 and sell it today you would earn a total of  6,377  from holding Fidelity Advisor Technology or generate 85.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Fidelity Advisor Technology  vs.  Lsv Value Equity

Fidelity Advisor Tec

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Fidelity Advisor Technology has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lsv Value Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lsv Value Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Fidelity Advisor and Lsv Value

The main advantage of trading using opposite Fidelity Advisor and Lsv Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor position performs unexpectedly, Lsv Value can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lsv Value will offset losses from the drop in Lsv Value's long position.

The idea behind Fidelity Advisor Technology and Lsv Value Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.